Aldila Swings to Q1 Profit on 50% Sales Increase

Aldila, Inc. reported net sales of $15.3 million and net income of $2.3 million, or 46 cents per share, for the three months ended March 31, 2004. In the comparable 2003 first quarter, ALDA had net sales of $10.2 million and a net loss of $169,000, or three cents per share loss.

“We are extremely pleased with the strong results achieved in our first quarter 2004. Driven by the overwhelming acceptance of our flagship NV(TM) wood shaft line by the golfing world, our sales increased by 51% versus the first quarter last year. Our net income of $2.3 million or $0.46 per share represents the best quarter the Company has had in the last 8 years. Unit sales climbed by 11% and average selling price increased by 37% quarter on quarter. Our cash and cash equivalents increased by $4.4 million to $11.3 million, which includes a $750,000 distribution from Carbon Fiber Technology LLC (“CFT”), our carbon fiber joint venture. Gross margin in the 2004 first quarter rose to 40% on a 252% increase in gross profit to $6.1 million as compared to 17% and $1.7 million in the first quarter of 2003,” said Mr. Peter R. Mathewson, Chairman of the Board and CEO.

“The success of the NV(TM) wood shaft line has opened the door to a multitude of new accounts which broadens our already large customer base,” Mr. Mathewson continued.

“On tour our NV(TM) remains a bona fide weekly contender for the most played shaft model on both the PGA and Nationwide Tours. More and more professionals world wide are trusting NV(TM) to deliver unsurpassed performance, power and feel in their driver, fairway woods and hybrid/utility clubs. At the recently completed Masters Tournament, Aldila emerged as the number one graphite shaft manufacturer,” Mr. Mathewson said.

“Our hockey business was relatively slow during the quarter due to new product development activities but we expect increasing sales as production is ramped up in the second quarter,” Mr. Mathewson said.

“Composite prepreg sales to third parties increased 124% versus the first quarter last year as interest in our products continues to grow,” said Mr. Mathewson.

The Company repurchased 45,000 shares of its common stock during the first quarter of 2004 at prices ranging between $3.50 and $5.82 per share. These purchases were made pursuant to the Company's previously announced stock buyback program.

                   ALDILA, INC. AND SUBSIDIARIES
          CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
                (In thousands, except per share data)

                                          Three months ended
                                                March 31,
                                            2004          2003
                                            ----          ----


NET SALES                                $ 15,298      $ 10,164
COST OF SALES                               9,174         8,425
                                         --------      --------
     Gross profit                           6,124         1,739
                                         --------      --------

SELLING, GENERAL AND ADMINISTRATIVE         2,435         1,926
                                         --------      --------
     Operating income (loss)                3,689          (187)
                                         --------      --------

OTHER EXPENSE (INCOME):
     Interest expense                           -             8
     Other, net                                (3)           30
     Equity in earnings of joint venture      (99)          (56)
                                         --------      --------

INCOME (LOSS) BEFORE INCOME TAXES           3,791          (169)
PROVISION FOR INCOME TAXES                  1,517             -
                                         --------      --------

NET INCOME (LOSS)                        $  2,274      $   (169)
                                         ========      ========


NET INCOME (LOSS) PER COMMON SHARE       $   0.47      $  (0.03)
                                         ========      ========

NET INCOME (LOSS) PER COMMON SHARE,
 ASSUMING DILUTION                       $   0.46      $  (0.03)